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French-based firm is city’s choice to run water system after 13 years with AWS

Published:April 15, 2010, 10:22 AM

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Updated: August 21, 2010, 5:42 AM

City officials are poised to end a 13-year relationship with a private company that has operated Buffalo’s water system, contending that a company based in France will do a better job for less money.

The Water Board has unanimously endorsed a plan to award a 10-year contract to Veolia Water, which operates numerous municipal water systems, including the one in Indianapolis, which is more than three times of the size of Buffalo’s operation.

While the Common Council and the Buffalo Municipal Water Finance Authority must still approve the pact, officials who scrutinized proposals suggested that Veolia will offer better customer service, greater efficiencies and a cheaper price than the current operator, American Water Services, which has run Buffalo’s system since 1997.

Document: Presentation about management of Buffalo water system

After receiving generally positive reviews in its early years, AWS had come under intense criticism recently for what some customers and city officials described as poor customer service.

Oluwole A. McFoy, chairman of the Water Board, said he is convinced that billing procedures, telephone wait times and accessibility to service representatives in person will be improved.

McFoy said the $5.07 million that the city would pay to Veolia is about 10 percent less than what AWS is currently charging.

The contract, which would take effect July 1, could be terminated after six months if the city is dissatisfied. It also contains performance-based clauses that would penalize Veolia if it fails to achieve certain benchmarks.

For example, McFoy said, the typical customer has waited about 3z minutes when calling with a question or problem.

“We want that wait time below a minute,” McFoy said.

Under the new contract, Veolia would install a new telephone system with special features, upgrade the billing system and make other improvements. The city also would end a controversial practice that allows the private operator to charge a 21 percent fee on delinquent payments, a charge that McFoy agreed is “outrageous.”

Veolia, whose New York clients include Schenectady, also would be required to work with an insurer to introduce, within the first year, a program that offers insurance to property owners, protecting them from costly water line repair charges.

One of the Council’s most vocal critics of the water system said his initial reaction to the Veolia contract is favorable. South Council Member Michael P. Kearns, who sits on the Municipal Water Finance Authority, said, “At first glance, I think this is going to bring some improvements and efficiencies into the system.”

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